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Walmart appears to be embarking on two new initiatives that could reshape its e-commerce business.

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Walmart is now focusing on developing its own digital brands rather than continuing to acquire such companies. The firm has found significant success with its mattress brand, Allswell, leading to a potential shift in strategy, CEO of Walmart's US e-commerce business Marc Lore said in an interview at the Code Commerce conference. In the past, Walmart spent hundreds of millions of dollars on digital brands including Bonobos, ModCloth, and Eloquii, but it's now incubating three new brands itself, and if they succeed Walmart could pivot to just creating its own digital brands. Developing its own brands could prove beneficial since it may cost less capital, and it can sell the products on a number of digital channels, including Walmart.com. In contrast, putting acquired brands on Walmart.com could negatively impact the brands' images and, in turn, sales.

The retailer announced it's rolling out its grocery delivery subscription to over 1,600 stores this year. The subscription — dubbed Delivery Unlimited — offers same-day delivery of all types of grocery products, including fresh items like produce, consumables, and some general merchandise, for a $98 annual fee, $12.95 monthly fee, or a per-delivery fee that doesn't require a subscription. Delivery Unlimited was piloted in four markets earlier this year and will use over 45,000 employees as personal shoppers. The service will launch Walmart into competition with Amazon's Prime subscription, which includes same-day delivery of groceries through Prime Now, as well as Target's Shipt.

These moves come as Walmart's e-commerce business faces stagnating growth and questions about its expenses, and they suggest Walmart may still be willing to spend to grow its business. Walmart's US e-commerce business posted solid annual growth of 37% in its fiscal Q2 2020 (ended July 31, 2019), but this is a deceleration from the 40% annual growth it turned a year prior and marks the fifth consecutive quarter it's grown 37-43% year-over-year (YoY).

While this is still strong growth, it might mean Walmart is having trouble improving on its previous performances. Additionally, its e-commerce business is reportedly set to lose $1 billion this year despite bringing in between $21 billion and $22 billion, and it may be facing pressure to cut costs. But launching an unlimited delivery service nationwide, which is likely costly to operate, and investing in creating new brands may mean Walmart is still willing to spend to boost its performance.

If Walmart wants to compete with Amazon, it'll have to continue to make significant investments that bring its offerings closer to those of the e-commerce titan. Walmart didn't necessarily have to create a competitor for Prime, but it did need to offer speedy delivery for a variety of products on a wide scale, and Delivery Unlimited helps it do that. It will need to make more investments that help it catch Amazon if it wants to challenge its top position in US e-commerce. For example, the size of Walmart's product selection still doesn't compare with Amazon's, so it may need to continue to acquire specialty retailers like Art.com that build out its listings in specific categories.

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